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June 25, 2019
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Daily Crunch: Huawei faces Android ban

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The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

1. Huawei responds to Android ban with service and security guarantees, but its future is unclear

Google is complying with a federal directive that placed Huawei and 70 of its affiliates on an “entity list,” meaning that any U.S. company needs government approval before doing business with the Chinese tech company.

In response, Huawei said today that it will continue to provide security updates and after-sales support to its existing lineup of Android smartphones. Still, what the company didn’t say will probably spark concerns.

2. TikTok owner ByteDance’s long-awaited chat app is here

The new app is called Feiliao, or Flipchat in English, a hybrid of an instant messenger plus interest-based forums, and it’s currently available for both iOS and Android. It arrived only four months after Bytedance unveiled its video-focused chatting app Duoshan.

3. Identity platform Auth0 raises $103M, pushing its valuation over $1B

Auth0 — pronounced “auth-zero” — provides authentication-as-a-service to its corporate customers. In other words, it offers a secure login system used to properly authenticate the identity of employees.

4. Sam Altman’s leap of faith

Earlier this year, founder-investor Sam Altman left his high-profile role as the president of Y Combinator to become the CEO of AI research outfit OpenAI. Connie Loizos talks to him about YC’s evolution and his current work.

5. Robin picks up $20M Series B to optimize the office

Robin hooks into Google Calendar and Outlook to help employees get a sense of what meeting rooms and activity spaces are available in the office, complete with tablet signage out front.

6. This week’s TechCrunch podcasts

The team at Equity has thoughts on the latest funding round for luggage startup Away, while we have plenty of opinions about  the latest “Game of Thrones” developments on Original Content.

7. What Uber and Lyft’s investment bankers got right

Danny Crichton argues that Uber and Lyft are proof that investment bankers actually are pretty smart in their advice about the pubic markets, and founders should be cautious about ignoring their words. (Extra Crunch membership required.)

Smart TVs add fuel to Xiaomi’s Q1 earnings

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Chinese smartphone company Xiaomi just released its first quarterly results since announcing its $1.48 billion pledge to focus on smartphones and ‘AIoT’, an acronym for Internet of Things powered by artificial intelligence.

Xiaomi’s adjusted net profit for the first quarter increased 22.4 percent year-over-year to 2.1 billion yuan ($300 million), while total revenue climbed 27.2 percent to 43.8 billion yuan ($6.33 billion).

Sales in India, where Xiaomi handsets dominate, as well as other countries outside China, continued to be a bright spot for the company. International markets brought in 38 percent of its total revenue over the first quarter, representing a 35 percent increase. Xiaomi’s overseas momentum came amid a global slowdown in the smartphone sector and at a time its rival Huawei copes with a technology ban that threatens to hobble international sales.

Smartphones remained as Xiaomi’s biggest revenue driver, though the segment had shrunk from 67.5 percent of total revenue in Q1 of 2018 to 61.7 percent a year later. According to Canalys, Xiaomi was the world’s fourth-largest smartphone maker by units shipped in the first quarter. A brand traditionally popular among male consumers, Xiaomi has made efforts to court female users by taking over Meitu’s smartphone business that would allow it to sell selfie-optimizing devices.

Xiaomi’s ‘IoT and lifestyle’ unit, which churns out a wide range of home appliances from air purifiers to suitcases, saw its share of revenue jump from 22.4 percent to 27.5 percent year-over-year.

Xiaomi said growth of this segment was primarily driven by smart TV sales, a new area of focus at the smartphone company. In January, Xiaomi announced taking a 0.48 percent stake in TV manufacturer TCL, deepening an existing alliance that saw the two work together to integrate Xiaomi’s operating system into TCL products.

Xiaomi has long tried to differentiate itself from other hardware firms by making money not just from gadgets but also from software and internet services sold through those devices. But the latter portion is still relatively paltry, accounting for just 9.7 percent of Xiaomi’s total revenue, compared to 9.1 percent a year before.

As of March, Xiaomi owned 261 million monthly active users through its MIUI operating system installed across all devices, a 37.3 percent growth YoY. The number of IoT devices, excluding smartphones and laptops, jumped 70 percent to reach approximately 171.0 million units.

Trump’s Huawei ban ‘wins’ one trade battle, but the US may lose the networking war

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While U.S. government officials celebrate what they must consider to be a win in their battle against the low-cost, high-performance networking vendor Huawei and other Chinese hardware manufacturers, the country is at risk of falling seriously behind in the broader, global competition for telecom tech and customers.

It may be a race that the U.S. is willing to concede, but it should be noted that Huawei’s sphere of influence on other shores continues to expand, even as the company’s ability to operate in the U.S. is completely proscribed.

Indeed, Huawei’s executive director and chairman of its investment review board, David Wang, told Bloomberg that, “Our U.S. business is not that big. We have global operations. We still will have stable operations.”

Wang is right… to a point. Huawei derives most of its sales from international markets, according to a 2018 financial report released earlier this year, but it depends heavily on technology from U.S. chip manufacturers for its equipment. Without those supplies, Huawei could find itself in a very difficult spot, indeed.

Huawei’s end of year financials showed its consumer devices business is now its main money-maker, while the majority of its revenue is not derived from the U.S. market

And the U.S. has its reasons for working to stymie Huawei’s efforts to expand the reach of its networking technologies as this excellent Twitter thread from Adam Townsend persuasively argues.

Essentially, China has invested its basically limitless capital into subsidizing next-gen wireless technology and buying up next-generation startups and innovators, all while the U.S. has borne early stage risk. Meanwhile, it is also using unlimited money to poach regulators and industry experts who might advocate against it.

Huawei continues to make inroads in nations across the emerging markets of Latin America, Eastern Europe, Southeast Asia and Africa where demand for connectivity is on the rise. Those are regions where the U.S. has plenty of strategic interests, but America’s ability to sway public opinion or entice governments to act against Chinese networking companies could be severely limited by its inability to offer meaningful incentives or alternatives to them.

Even with the passage of the BUILD Act in October 2018, which was meant to revitalize U.S. foreign aid and investment with a $60 billion package, it’s worth noting that China spent nearly $47 billion in foreign investment in Europe alone in 2018. Chinese direct investments totaled another $49.45 billion into Africa and the Middle East and $18 billion into South America, according to data from the American Enterprise Institute, compiled by Foreign Policy.

Map courtesy of the American Enterprise Institute.

Those investments have turned nations that should be staunch political allies into reluctant or simply rhetorical backers of the U.S. position. Take the relationship between the U.S. and Brazil, for example — a historically strong partnership going back years and one that seemingly only strengthened given the similarities between the two ultraconservative leaders in power in both nations.

However, as Foreign Affairs reports, Brazil is unlikely to accede to President Trump’s demands that Brazil aids in steps to block China’s economic expansion.

“Brazilian business groups have already begun to defend the country’s deep trade ties to China, rightly pointing out that any hope of containing China and once more turning the United States into Brazil’s most important trading partner is little more than unrealistic nostalgia,” writes Foreign Affairs correspondent, Oliver Stuenkel. “Working alongside powerful military generals, these business associations are mobilizing to avoid any delays that sidelining Huawei in the region could cause in getting 5G up and running.”

The whole article is worth reading, but its refrain is that the attempts by U.S. government officials to paint Huawei and Chinese economic inroads as a national security threat in developing economies are largely falling on deaf ears.

It’s not just networking technologies either. As one venture capitalist who invests in Latin America and the U.S. told TechCrunch anonymously: “It’s interesting how the U.S.-China relationships are going to affect what is happening in Latin America. The Chinese are already being more aggressive on the banking side.”

China’s big technology companies are also taking an interest in South America, both as vendors and as investors on the continent.

In an article in Crunchbase, the South American and Chinese-focused venture capitalist, Nathan Lustig underscored the trend. Lustig wrote:

In both the private and the public sectors, China is swiftly increasing its support for Latin America. Chinese expertise in financial technology, as well as its influence in developing markets around the world, is turning China into a strategic partner for startups and entrepreneurs in Latin America. Most of the Chinese investment in Latin America so far is going to Brazil, although this is likely to spread across the region as Chinese investors become better-acquainted with the local tech ecosystems, most likely to Mexico.

Beyond the Didi Chuxing acquisition of Brazil’s 99 in January, Chinese companies began investing heavily in Brazilian fintech startups, specifically Nubank and StoneCo, this year.

Indeed, China has an entire catalog of low-cost technologies and economic packages from state-owned and privately held investors to support their adoption, backing up its position as the leader for tech across a range of applications in emerging markets.

For the U.S. to compete, it will have to look beyond protectionism at its shores to actual commitments to greater economic development abroad. With lower tax revenues coming in and the prospect of giant deficits building up as far as the eye can see, there’s not much room to promote an alternative to Huawei internationally. That could leave the country increasingly isolated and create far more problems as it gets left behind.

Daily Crunch: Trump targets Huawei with emergency declaration

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The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

1. Trump declares national emergency to protect US networks from foreign espionage

While the U.S. already restricted government contractors and federal agencies from using technology supplied by Huawei or its subsidiaries, this new executive order gives Commerce Secretary Wilbur Ross and other federal agencies broad powers of oversight and approval over private company transactions.

It seems that tech has been on Trump’s mind, as the White House also launched a website aimed at collecting reports of social media censorship due to their political views.

2. Instagram is killing Direct, its standalone Snapchat clone app, in the next several weeks

Facebook says that moving forward, the Instagram team will channel all developments and activity into the direct messaging feature of the main Instagram app.

3. Europol, DOJ announce the takedown of the GozNym banking malware

Europol and the U.S. Justice Department, with help from six other countries, have disrupted and dismantled the GozNym malware, which they say stole more than $100 million from bank accounts since it first emerged.

4. Mobile ticketing company TodayTix raises $73M in new funding

TodayTix says it’s now sold more than 4 million tickets, representing 8% of annual Broadway ticket sales and 4% for London’s West End.

5. Samsung reportedly readying Galaxy Fold for release after finding ‘fix’

According to reporting from Yonhap News Agency, Samsung is currently testing the handset with mobile carriers in Korea, putting the phone’s official release some time next month.

6. Walmart beats on earnings in Q1, with US e-commerce up by 37%

The company has been heavily investing in the key categories of home, fashion and grocery over the past several years as part of its efforts to better compete with Amazon.

7. Reality Check: The marvel of computer vision technology in today’s camera-based AR systems

AR experiences can seem magical, but what exactly is happening behind the curtain? (Extra Crunch membership required.)

Huawei’s P30 Pro excels on the camera front

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It’s been a month since Huawei unveiled its latest flagship device — the Huawei P30 Pro. I’ve played with the P30 and P30 Pro for a few weeks and I’ve been impressed with the camera system.

The P30 Pro is the successor to the P20 Pro and features improvements across the board. It could have been a truly remarkable phone, but some issues still hold it back compared to more traditional Android phones, such as the Google Pixel 3 or OnePlus 6T.

A flagship device

The P30 Pro is by far the most premium device in the P line. It features a gigantic 6.47-inch OLED display, a small teardrop notch near the top, an integrated fingerprint sensor in the display and a lot of cameras.

Before diving into the camera system, let’s talk about the overall feel of the device. Compared to last year’s P20 Pro, the company removed the fingerprint sensor at the bottom of the screen and made the notch smaller. The fingerprint sensor doesn’t perform as well as a dedicated fingerprint sensor, but it gets the job done.

It has become hard to differentiate smartphones based on design as it looks a lot like the OnePlus 6T or the Samsung Galaxy S10. The display features a 19.5:9 aspect ratio with a 2340×1080 resolution, and it is curved around the edges.

The result is a phone with gentle curves. The industrial design is less angular, even though the top and bottom edges of the device have been flattened. Huawei uses an aluminum frame and a glass with colorful gradients on the back of the device.

Unfortunately, the curved display doesn’t work so well in practice. If you open an app with a unified white background, such as Gmail, you can see some odd-looking shadows near the edges.

Below the surface, the P30 Pro uses a Kirin 980 system-on-a-chip. Huawei’s homemade chip performs well. To be honest, smartphones have been performing well for a few years now. It’s hard to complain about performance anymore.

The phone features a headphone jack, a 40W USB-C charging port and an impressive 4,200 mAh battery. For the first time, Huawei added wireless charging to the P series (up to 15W).

You can also charge another phone or an accessory with reverse wireless charging, just like on the Samsung Galaxy S10. Unfortunately, you have to manually activate the feature in the settings every time you want to use it.

Huawei has also removed the speaker grill at the top of the display. The company now vibrates the screen in order to turn the screen into a tiny speaker for your calls. In my experience, it works well.

While the phone ships with Android Pie, Huawei still puts a lot of software customization with its EMUI user interface. There are a dozen useless Huawei apps that probably make sense in China, but don’t necessarily need to be there if you use Google apps.

For instance, the HiCare app keeps sending me notifications. The onboarding process is also quite confusing as some screens refer to Huawei features while others refer to standard Android features. It definitely won’t be a good experience for non tech-savvy people.


(P30 Pro on the left, P30 on the right)

Four cameras to rule them all

The P20 Pro already had some great camera sensors and paved the way for night photos in recent Android devices. The P30 Pro camera system can be summed up in two words — more and better.

The P30 Pro now features not one, not two, not three but f-o-u-r sensors on the back of the device.

  • The main camera is a 40 MP 27mm sensor with an f/1.6 aperture and optical image stabilization.
  • There’s a 20 MP ultra-wide angle lens (16mm) with an f/2.2 aperture.
  • The 8 MP telephoto lens provides nearly 5x optical zoom compared to the main lens (125mm) with an f/3.4 aperture and optical image stabilization.
  • There’s a new time-of-flight sensor below the flash of the P30 Pro. The phone projects infrared light and captures the reflection with this new sensor.

It has become a sort of a meme already — yes, the zoom works incredibly well on the P30 Pro. In addition to packing a lot of megapixels in the main sensor, the company added a telephoto lens with a periscope design. The sensor features a mirror to beam the light at a right angle and put more layers of glass in the sensor without making the phone too thick.

The company also combines the main camera sensor with the telephoto sensor to let you capture photos with a 10x zoom with a hybrid digital-optical zoom.

Here’s a photo series with the wide angle lens, the normal lens, a 5x zoom and a 10x zoom:

And it works incredibly well in daylight. Unfortunately, you won’t be able to use the telephoto lens at night as it doesn’t perform as well as the main camera.

In addition to hardware improvements, Huawei has also worked on the algorithms that process your shots. Night mode performs incredibly well. You just have to hold your phone for 8 seconds so that it can capture as much light as possible. Here’s what it looks like in a completely dark room vs. an iPhone X:

Huawei has also improved HDR processing and portrait photos. That new time-of-flight sensor works well when it comes to distinguishing a face from the background for instance.

Once again, Huawei is a bit too heavy-handed with post-processing. If you use your camera with the Master AI setting, colors are too saturated. The grass appears much greener than it is in reality. Skin smoothing with the selfie camera still feels weird too. The phone also aggressively smoothes surfaces on dark shots.

When you pick a smartphone brand, you also pick a certain photography style. I’m not a fan of saturated photos, so Huawei’s bias toward unnatural colors doesn’t work in my favor.

But if you like extremely vivid shots with insanely good sensors the P30 Pro is for you. That array of lenses opens up a lot of possibilities and gives you more flexibility.

Fine prints

The P30 Pro isn’t available in the U.S. But the company has already covered the streets of major European cities with P30 Pro ads. It costs €999 ($1,130) for 128GB of storage — there are more expensive options with more storage.

Huawei also unveiled a smaller device — the P30. It’s always interesting to look at the compromises of the more affordable model.

On that front, there’s a lot to like about the P30. For €799 ($900) with 128GB, you get a solid phone. It has a 6.1-inch OLED display and shares a lot of specifications with its bigger version.

The P30 features the same system-on-a-chip, the same teardrop notch, the same fingerprint sensor in the display, the same screen resolution. Surprisingly, the P30 Pro doesn’t have a headphone jack while the P30 has one.

There are some things you won’t find on the P30, such as wireless charging or the curved display. While the edges of the device are slightly curved, the display itself is completely flat. And I think it looks better.

Cameras are slightly worse on the P30, and you won’t be able to zoom in as aggressively. Here’s the full rundown:

  • A 40 MP main sensor with an f/1.8 aperture and optical image stabilization.
  • A 16 MP ultra-wide angle lens with an f/2.2 aperture.
  • An 8 MP telephoto lens that should provide 3x optical zoom.
  • No time-of-flight sensor.

In the end, it really depends on what you’re looking for. The P30 Pro definitely has the best cameras of the P series. But the P30 is also an attractive phone for those looking for a smaller device.

Huawei has once again pushed the limits of what you can pack in a smartphone when it comes to cameras. While iOS and Android are more mature than ever, it’s fascinating to see that hardware improvements are not slowing down.

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